History
Wisconsin Evangelical Lutheran Synod (WELS) was established in 1850 as an unincorporated association of congregations, pastors and teachers who believe in a common theological doctrine. In 1892, the Wisconsin Synod, the Michigan Synod, and the Minnesota Synod formed a federation. In 1899, WELS formed a Wisconsin not-for-profit religious corporation of the same name that carried out tasks for the association. In 1997, the association and the corporation were restructured into a single corporate entity. About 80 percent of WELS Members currently reside in Wisconsin, Michigan and Minnesota.
The synod established the Kirchbaufond, the predecessor of the Church Extension Fund (CEF), in the 1906 convention. This fund was to receive gifts and make loans to congregations. By 1911 the fund had grown to $3,000. The 1921 Synod convention authorized the fund to borrow money. By 1931 the fund had grown to $357,000 with almost one half of the loans made with borrowed money. During the Great Depression period borrowing stopped. By 1961 the fund had grown to 3 million dollars. Also in 1961 WELS in convention resolved to again use borrowed money in the WELS CEF -- provided that the mission congregations paid all the interest costs. In 1971 the outstanding loans were 11.25 million dollars with fund equity accounting for 7.5 millions dollars. At the 1971 WELS convention delegates voted a budgetary appropriation to help pay the interest on congregational loans. This action together with the adoption of a uniloan system allowed the fund to revolve more rapidly (25 years compared to 50 years previously). By 1981 the loans outstanding had increased to 42.8 million dollars and the fund equity to 18.9 million dollars. The 1981 WELS convention brought several changes. Due to the higher interest rate environment -- which increased congregational interest rates on loans -- WELS CEF established a balloon payment for the loans at the twentieth year. The WELS CEF was a beneficiary of the “Reaching Out” capital funds offering and received 8.2 million dollars in fund equity during the 1983‑86 period.
During that period many changes were also made on how assistance has been given to mission congregations. A major change to WELS CEF came in 1971 when the present uniloan system was implemented. At that time the uniloan system met the needs of the missions better than the previous system. In subsequent years there have been minor changes to react to individual problems, i.e., higher interest rates, insufficient available funds, inadequate interest subsidies and constrained congregational growth. The cumulative impact made the system so cumbersome in application it no longer adequately served the congregations, WELS or WELS CEF. The result was that some congregations assumed a larger debt than they could manage. An increasing number of congregations were having difficulties meeting their debt obligations, which opened the possibility to negative feeling about the entire ministry.
Today’s high cost environment for the starting of new congregations has accentuated this need for change in the way the WELS provides start-up assistance dollars. The method of repayment needs to be easily understood by the congregation and easy to administer so as not to stile the growth of the congregation. Yet it must be a promotable/usable financial vehicle in order to generate support from WELS members and congregatons.
In 1989 the Board of Trustees -- the board that was constitutionally responsible for the WELS CEF-- appointed a committee to review the fiscal soundness of WELS CEF. Its conclusion was that “because of the 50% capital base and 50% interest subsidy from the synod, WELS CEF is fiscally sound. No major expansion of the work of WELS CEF can be accomplished until either a faster return of the loan dollars to the WELS CEF is obtained or increases are made to the capital base or interest subsidy. It seems more feasible to increase the capital base than increase the subsidies. The greatest impact will be realized by lessening the time in which loan dollars are returned to WELS CEF.”
Subsequently, a joint committee of the Board of Trustees and Board for Home Missions was formed to address how best to make loans to new congregations -- taking into account the needs of the mission congregations, WELS CEF and the impact on the WELS budget. That Joint Committee was absolved when the restructuring occurred and the Synodical Council was established.
Prayerful consideration was given to whether or not WELS should continue to assist fledgling congregations to acquire land and facilities as they mature in their programs for reaching the lost souls. The conclusion was that the WELS should continue to support these efforts. The question remained how best to accomplish the task.
Many approaches were studied in an attempt to find the right combination. The use of grants, interest-free loans, adjustable mortgage rates, balloon payments, fixed percentage of income payments, etc., was considered. All these options were evaluated and tested against the backdrop of the existing WELS CEF loan/subsidy arrangements. The resulting WELS CEF loan/grant proposal, which the Board of Trustees approved for pilot application effective January 1, 1993, was an amalgamation of the best part of these approaches. The Synod in convention in 1993 responded favorably to this proposal.
The past dozen years have seen tremendous growth for WELS CEF. Currently, nearly 6,000 investors have entrusted WELS CEF with nearly $70 million. WELS CEF in partnership with the Board for Home Missions has provided more than $48 million in loans to over 75 different ministries during the past 3 fiscal years alone. Outstanding loans are currently over $116 million...and demand keeps growing.
In additon, since 1993 more than $20 million in grants have been distributed to missin congregations across North America. During the past 5 years, more than half of that amount has been distributed to more than 60 mission congregatons. However, we are at a crtical point. While demand for grants keeps growing -- gifts and donations to WELS CEF Assistance Fund have dropped significantly during the past few years.
WELS members and WELS congregations can help further our mission by investing in WELS CEF. More gifts and bequests are also prayerfully requested if we are to achieve the goals of continuing to rely on the WELS CEF Assistance Program to help fund more mission congregations.